Income Tax Deduction Table

7/27/2019 Income Tax Deduction Table

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REPUBLIC OFTRINIDAD AND TOBAGO

INCOME TAX

DEDUCTION TABLE

EFFECTIVE 2003 UNTIL FURTHER NOTICE


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FOREWORD

The Pay As You Earn (P.A.Y.E.) System is provided for by sections 98-101 of the Income Tax Act,Chap. 75:01 and the Income Tax (Employment) Regulations made in accordance with section 125 ofthe Act. Sections 98-100 deal with the obligations of employee and employer and define

emoluments which are to be subject to P.A.Y.E. Section 101 requires the Board to provide TaxDeduction Tables.

The Board of Inland Revenue has prepared easy to use P.A.Y.E. Tax Deduction Tables which showthe amount of tax to be withheld from wages, salaries and other emoluments. In addition,instructions (including examples) covering all aspects of the P.A.Y.E. system and its applicationhave been prepared.

HASEENA ALI

Chairman,Board of Inland Revenue


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iii

CONTENTSPage

I. DEFINITIONS

1. Employer 12. Employee 13. Office 14. Emoluments 15. Chargeable Income 1

II. DECLARATION BY EMPLOYEES: CALCULATION OF TOTAL DEDUCTIONS

1. Form T.D.1 2

III. TAX DEDUCTION TABLES 2

IV. USE OF TAX TABLES AND EXAMPLES1. Emoluments to be taken into account in determining chargeable income 22. Direction on use of tables 33. Examples for deduction of PAYE Taxes 3

V. DEDUCTION OF TAX BY EMPLOYER

1. Deduction of Tax on Payment of Emoluments 82. Payments from which Income Tax should not be deducted 93. Deduction of Tax from Payments relating to Termination of Employment 114. T.D. 4 Supplementary 11

5. Health Surcharge 126. Disputes 127. Agreements not to Deduct are Void 128. Change of Employment 129. Retirement of Employee 12

10. Death of Employee 1211. Death of Employer 1212. Change of Ownership-Business 12

VI. PAYMENT AND ACCOUNTING FOR TAX AND HEALTH SURCHARGE

1. Payment of Tax to the Board of Inland Revenue 132. Penalty for Failure to Deduct and Remit Taxes 133. Accounting for Tax Deducted and Keeping Records 134. Distribution of Certificates of Emoluments Paid and Taxes Deducted 135. When T.D. 4 Certificate is to be Delivered 136. Reconciliation of Records 147. Accounting for Arrears of Tax 148. Persons Paying emoluments in the Public Service 14

VII. TAX RATES 1997-2002 14


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VIII. B.I.R. TAX TABLES 15

INSTRUCTIONS

I. DEFINITIONS

1. Employer is defined in the legislation as any person paying emoluments to an employee.

The term includes any person paying emoluments on behalf of another person such as amanager of a company.

2. Employee means any person, not being the holder of an office, in receipt of emoluments.

3. Office means a position, not being an employment or place entitling the holder thereof to afixed or ascertainable stipend or remuneration, and includes the Office of a Minister ofGovernment, the Office of a member of the Senate or the House of Representatives ofTrinidad and Tobago, a member of the Municipal or County Council and any other office,the holder of which is elected by popular vote or is elected or appointed in a representativecapacity and also includes the position of a company director.

4. Emoluments means all salary, wages, overtime, bonus, remuneration, the value of boardand lodging, stipend, meal allowances, commission or other amounts for services, directorsfees, retiring allowances or pensions, and any other perquisites arising or accruing in orderived from or received in Trinidad and Tobago and which are assessable to income tax, butshall not include any salary or share of profits arising from a trade or business, profession orvocation carried on by any person either by himself or in partnership with another person.

5. For the purpose of the Tax Deduction Tables, Chargeable Income means total emolumentsminus total deductions. Any or all of the following may be claimed by a resident individualas deductions:

(a) (i) An individual under 60 years of age A personal allowance of $25,000.00(ii) An individual over 60 years of age A personal allowance of $30,000.00

(b) (i) Interest on loans/bridging finance in respect of property to be used by theowner as his residence.

(ii) Interest on loans in respect of property used on behalf of the owner or rent-free by the occupier for the purpose of residence. In each case the claim islimited to $18,000 per taxpayer.

(iii) Expenses incurred in respect of Tertiary Education. (certain conditions apply)

NB: The aggregate amount of the deductions made under b (i-iii) above shall notexceed the sum of $18,000 in any year of income.

For the purpose of paragraph (ii) Owner of residence means the legally titledowner of the property i.e whose name appears on the Land and BuildingReceipt / Deed of Conveyance.

(c) (i) An allowance for first time acquisitions of homes.

NB: This allowance should not exceed $10,000.00 and may be claimed for the firstFive years commencing from the year in which the house was acquired.

(d) (i) N.I.S. contributions limited to 70 per cent of such contributions.


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(ii) Contributions to Government Widows and Orphans Pension Fund, approvedProvident and Superannuation Fund, approved Fund or Scheme, approvedPension Fund Plan and premiums paid under an approved Deferred AnnuityPlan.

NB: The aggregate amount of the deductions made under c (i) and (ii) above shallnot exceed the sum of $12,000 in any year of income.

(iii) Alimony/Maintenance payments made to a spouse or a former in accordancewith a court order.

II. DECLARATION BY EMPLOYEES: CALCULATION OF TOTAL DEDUCTIONS

1. Form T.D. 1 is the prescribed form on which to complete declarations and is solely for thepurpose of making deductions of tax from pay.

An employee is required to file a T.D. 1 on the commencement of employment and need notfile a new declaration unless there is a change in allowable deductions or as instructed

by the Board on Inland Revenue.

2. Approval by the Board is required in the following cases:

(a) where a person receives emoluments from more than one source; and(b) where claims are made in respect of loan interest, tertiary expenses (5(b) above), and/or

an approved Deferred Annuity Plan, and /or Alimony/Maintenance.

The Board, on the basis of the information in the T.D. 1 will advise the employer(s) of totaldeductions to be taken into account in determining the tax to be deducted from emoluments.

TD 1A

It should be noted that where an employee has income from more than one source, the Board shallissue a directive (Form TD 1A) directing the employer to deduct tax from in accordance with thedirective. The Form TD 1A replaces the Form TD 1 and must be complied with in the same manneras authorized by the Form TD 1.

III. TAX DEDUCTION TABLES

The tables are designed to show annual tax to be deducted, as applied to chargeable income (annualpay less deductions). Amounts to be deducted from employees emoluments are to be determined asfollows:

(a) Weekly paid employees-Divide annual tax by 52;(b) Fortnightly paid employees-Divide annual tax by 26;(c) Monthly paid employees-Divide annual tax by 12.

IV. USE OF TAX TABLES AND EXAMPLES

1. Emoluments to be taken into account in determining chargeable income

In arriving at chargeable income, emoluments to be taken into account include:


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(a) taxable benefits, the value of board and lodging or any other benefits derived by theemployee from his employment;

(b) overtime which is paid with regular emoluments;(c) leave pay-when an employee ceases employment and goes on terminal leave, tax must be

deducted from leave pay as if employment were continuing.(d) Emoluments credited to an employees account with the employer (not uncommon in

cases of directors) are to be treated as paid and tax deducted at the time the credit is

made; and(e) Advances of pay-Tax must be deducted from payments representing emoluments paid inadvance to employees.

(f) MOTOR VEHICLE AND EQUIPMENT BENEFIT:Where the employer provides a director or employee with a motor vehicle or anyequipment belonging to a company and the same is available for the private use of thedirector or employee, the value per month of the benefit which must be included in theemoluments of the director or employee is

(i) one per cent (1%) of the cost of acquisition of the motor vehicle or equipment;or(ii) thirty-three and a third per cent (33 1/3%) of the monthly rental of the motor

vehicle or equipment incurred by the company.A taxable benefit arises whether or not the director or employee has theexclusive use of the motor vehicle/equipment. For example, where he is takento and from his home in a car, provided by the employer, which is nototherwise at his disposal, this facility is considered a perquisite and the valueof such is taxable.

2. Direction on use of tables

(a) The tables are to be used as shown in the examples. Permission must be obtained from theBoard of Inland Revenue to deduct an amount less than the amount shown in the tables;

(b) Do not deduct tax from a resident employee whose annual emoluments do not exceed theamounts shown hereunder:

Weekly $480. ($24,960 p.a)Fortnightly $961. ($24,986 p.a)Monthly $2,083. ($24,996 p.a)Annually $25,000.

3. Examples for Deduction of P.A.Y.E. Taxes

(For the purposes of these Tables, Chargeable Income and Emoluments are defined at (5) onpage 1).

Example A Weekly paid wages and benefits - $600. Deductions $27,800. ($25,000. Personalallowance + $2,800. other deductions as shown on T.D. 1).

1. Multiply $600 by 52. Result - $31,200 employees annual emoluments.2. Determine Chargeable Income by deducting total deductions from annual emoluments:

$31,200 - $27,800 = $3,400.


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3. Look down column of tables headed Chargeable Income for line indicating $3,201 -$3,400, which shows annual tax to be deducted $850.

4. Divide $850 by 52. Result - $16.35 is the amount of tax to be deducted per pay period.

Example B Fortnightly paid wages and benefits - $1,400. Deductions $28,235 ($25,000personal allowance + $3,235 other deductions as shown on T.D.1).

1. Multiply $1,400 by 26. Result-$36,400-employees annual emoluments.2. Determine Chargeable Income by deducting total deductions from annual emoluments:$36,400 - $28,235 = $8,165.

3. Look down column of tables headed Chargeable Income for $8,001 - $8,200 which showsannual tax to be deducted $2,050.

4. Divide $2,050 by 26. Result-$78.85 is the amount of tax to be deducted per pay period.Example C- Monthly paid salaries and benefits $4,000 Deductions $26,735 ($25,000 Personalallowance + $1,735 other allowances as shown on T.D. 1).

1. Multiply $4,000 by 12. Result-$48,000-employees annual emoluments.2. Determine Chargeable Income by deducting total deductions from annual emoluments:

$48,000-$26,735=$21,265.3. Look down column of tables headed Chargeable Income for $21,201 - $21,400 whichshows annual tax to be deducted $5,350.

4. Divide $5,350 by 12. Result-$445.83 is the amount of tax to be deducted per pay period.

Example D-Chargeable income exceeds maximum amount ($238,000) shown on tables

1. Chargeable Income $284,000.2. Determine actual tax payable on $284,000 by reference to rates shown on Page 14

Chargeable Income Tax Payable

$50,000 25% $12,500.00

$234,000 @ 30% $70,200.00Total $284,000 $82,700.00

3. Divide $82,700 by 12 or 26 or 52 as the case may be to determinemonthly/fortnightly/weekly deductions.

4. Result: Monthly deductions- $6,891.67; Fortnightly deductions-$3,180.77; Weeklydeductions-$1,590.38

Example E- Deductions from Annual Bonus.

1. Chargeable Income as previously determined, say $108,000. Annual Bonus-$12,000.2. Add Chargeable Income previously determined ($108,000) to Annual Bonus ($12,000)

Result-$120,000.3. Look down column of tables headed Chargeable Income for $119,801 - $120,000 which

shows annual Tax to be deducted $33,500.4. Annual Tax to be deducted as previously determined by reference to chargeable income

$108,000 was $29,900.005. Compare results at 3 and 4.

Chargeable Income $120,000. Annual Tax-$33,500.00Chargeable Income $108,000. Annual Tax-$29,900.00


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Difference between $33,500 and $29,900 is $3,600.6. Tax to be deducted from Bonus of $12,000 is $3,600.00

Example F-Deductions where there are pay increases which are not retroactive.

1. Pay increased from $2,500 to $2,600 per month with effect from July 1.

Total Deductions $28,200. ($25,000 Personal allowance + $3,200 other deductions as

shown on T.D. 1)

2. Gross amount paid and tax deducted to June 30, would be as shown hereunder:

Amount paid-$15,000 ($2,500 x 6 months)

Taxes deducted $225.00 (6 months @ $37.50 per month) as determined by reference toChargeable Income-$1,800 (i.e., Annual Pay-$30,000. less deductions-$28,200.).

3. Determine pay due for period July to December at $2,600 per month. ($2,600 x 6 months)Result-$15,600.

4. Determine revised annual pay. Add amount paid at (2) to result at (3)- $15,000 + $15,600.Total $30,600.

5. Determine tax to be deducted at Chargeable Income $2,400 (i.e., Annual Pay $30,600. lessdeductions $28,200). Result-$600.00

6. Determine Tax to be deducted for July to December:

Tax to be deducted from pay $2,072.00 $600.00Less: Tax already deducted $ 952.00 $225.00Balance of tax to be deducted $1,120.00 $375.00

7. For months July-December monthly tax deductions should be $375 divided by 6. Result-$62.50.

Example G-Deductions where there are salary increases which are retroactive.

1. On June 1, 2003 salary increased from $5,885 per month to $6,125 per month with effectMay 1, 2001. Total deductions $50,235 ($25,000 Personal allowance + $14,000 Alimonyand $11,235 other deductions as shown on T.D.1).

2. Gross amount paid and tax deducted for period January 1 to May 31, 2003 would be asshown hereunder:


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Amount paid - $29,425-($5,885x5 months).

Tax deducted-$2,125. (5 months @ $425 per month) as determined by reference tochargeable income $20,385. (i.e. Annual Pay - $70,620. Less deductions $50,235).

3. Determine pay due for June 1 to December 31, 2003 and tax deductible.

Pay due June 1 to December 31, 2003 $42,875 ($6,125 x 7 months).

Taxes deductible $3,412.50 (7 months @ $487.50 per month) as determined by reference tochargeable income $23,265. (i.e., Annual Pay-$73,500. Less deductions $50,235).

4. Determine revised annual pay and annual tax deductible. Add results at (2) and (3).

Annual pay $29,425 + $42,875 = $72,300.Annual tax deductible- $2,125 + $3,412.50 = $5,537.50.

5. Determine Arrears due for the period May 1, 2002 to May 31, 2003 (13 months).

($6,125-$5,885 = $240 per month)Arrears $240 x 13 Results-$3,120.

6. Determine revised Annual Income (Arrears included) and Tax deductible. Add results at (4)and (5).

Annual Income including arrears = $75,420 ($72,300 + $3,120).Tax deductible - $6,300 as determined by reference to Chargeable Income $25,185 (i.e.,Annual Income $75,420 less deductions-$50,235).

7. Tax to be deducted on arrears of $3,120 is as follows:Tax deductible at (6) minus tax deductible at (4).Result-$762.50 ($6,300. - $5,537.50).

Example H-Deductions where a resident individual commences employment in Trinidad andTobago for the first time.

Employment commences August 1, at salary of $6,000 per month.Deductions $27,800 ($25,000 personal allowance + $2,800 other deductions as shown onT.D.1).

1. Multiply monthly salary by remaining number of pay periods in the year:$6,000 x 5 = $30,000. (Employees Gross Income for the year).

2. Determine chargeable income. Gross income minus deductions: $30,000 - $27,800 = $2,200.3. Look down column of tables headed Chargeable Income for line $2,001 - $2,200 which

shows tax to be deducted as $550.4. Divide $550 by 5. Result-$110.00 is the amount to be deducted from employees earnings for

each of the months August to December.

Example I-Deductions where the tax is paid by the employer on behalf of the employee oremoluments are paid free of tax or net of tax.


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1. Determination of Chargeable IncomeStep 1: (a) Determine annual emoluments inclusive of:

(i) Salary/Wages/Fees(ii) Value of free Boarding and Lodging(iii) Motor Vehicle benefits(iv) Entertainment Allowance

(v) Overseas travel entitlement(vi) Any other benefits/payments made by the employer

(b) Deduct $25,000. Personal allowance/Deductions as per T.D. 1

Step 2: Determine into which of the following ranges the result at Step 1 falls:Range (a) $0-$37,500.Range (b) Over $37,500.

Step 3: Computation of Chargeable Income

(i) Where the Result per Step 1 falls into Range (a) Multiply the result per Step 1 by 100 and divide by 72:Example: Annual Emoluments net of tax-$54,000Result per Step 1 ($54,000-$25,000) = $29,000Chargeable Income: $29,000 x 100 72 = $40,278 (to nearest $).

(ii) Where Result per Step 1 falls into Range (b).

$36,000 of the result at Step 1 will relate to chargeable income of $50,000;

Chargeable income in respect of the excess is determinable by multiplying the excess

by 100 and dividing by 65.

Example: Annual Emoluments net of tax-$96,000:

Result per Step 1($121,000-$25,000) = $96,000

Chargeable Income re first $36,000 is $50,000.00

Chargeable Income re excess, i.e. $60,000= $60,000 x 100 65 = $92,307.69

Total Chargeable Income $142,307.69

2. Determination and Remittance of PAYE

Having determined chargeable income, PAYE per pay period can be determined as shown inthe appropriate earlier example.

PAYE must be remitted to the Board by the Employer on or before the fifteenth day of themonth following that in which emoluments were payable.

3. Taxpayers Total Income


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A taxpayer whose emoluments (inclusive of taxable allowances, the value of free board andlodging or any other benefits) are paid free of tax or net of tax is deemed to be paid theamount computed as chargeable income + $25,000 Personal allowance. This amount shouldappear in the Gross Income column or Deductions as per T.D. 1 of his T.D. 4 (certificate ofemoluments paid and tax deducted) for the relevant income year.

Example J-Deductions where the employee has not filed a T.D. 1 with his employer.Gross Income $6,100 per month.

1. Determine annual income: $6,100 x 12 = $73,200.2. Look down column of tables headed Chargeable Income for line indicting

$73,001-$73,200 which shows annual Tax to be deducted $19,460.00

3. Divide $19,460.00 by 12. Result $1,621.67 is the amount of tax to be deducted per payperiod.

Example K-Deductions in respect of Non-Resident Employees

Non-Residents are not eligible for deductions or tax credits. As such, non-residents

annual income and chargeable income are the same.

Monthly emoluments-$15,000-Peruid of Employment-4 months.

(i) multiply $15,000 by 4 = $60,000. Employees Annual

Emoluments/Chargeable Income.(ii) Look down column of tables headed Chargeable Income for lineindicating $59,801-$60,000 which shows annual tax to be deducted$15,500.

(iii) Divide $15,500 by 4-Result-$3,875. is the amount of tax to be deductedper pay period.

V. DEDUCTION OF TAX BY EMPLOYER

1. Deduction of Tax on Payment of Emoluments

Every employer shall deduct tax on the payment of emoluments to any employee or holder of anoffice. Taxable emoluments are those arising or accruing in or derived from or received inTrinidad and Tobago. Deduction from pay is required to be made in accordance with the TaxTables. Only the Board of Inland Revenue has the authority to reduce tax deductions of anemployee as shown on the Tax Tables. The Board will determine the amount to be deducted inthe following cases:

(a) where payment is made at other than regular, weekly, fortnightly, monthly or annualintervals, e.g. persons paid on a commission basis only;


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(b) in the case of casual or seasonal workers, if tax were deducted according to the Tablefrom the six (6) months (say) during which they are employed and the total tax wouldfar exceed their liability calculated on an annual basis;

(c) where the Board decides that the class of employee or nature of the emoluments issuch as to make the application of the table impracticable;

(d) in the case of employees with more than one employment;(e) where claims are made in respect of deductions for Alimony/Maintenance, premiums

for deferred annuity plans and interest on loans in respect of owner-occupied propertyand tertiary education expenses.

2. Payments from which Income Tax should not be deducted

Tax is not to be deducted from emoluments in the following cases:

(a) where the official emoluments of the employee or holder of office is exempt from tax,e.g., the President of the Republic of Trinidad and Tobago

(b) where the emoluments are pensions earned outside Trinidad and Tobago. Theremay be exceptions to this however, where a Double Taxation Agreement existsbetween Trinidad and Tobago and that Country;

(c) where the total annual emoluments of a resident individual from all sources does notexceed $25,000. ($30,000 where the individual is over 60 years of age).

3. Deduction of Tax from Payments related to Termination of Employment

Before making a payment which can be considered as Severance Pay (whether by reason of

redundancy or ill-health) or a payment connected with the termination of holding of office

or employment not otherwise chargeable to tax, the PAYE Section, Board of Inland

Revenue, Corner Queen and Edward Streets must be supplied with the following

information:

(i) the name and income tax file number of the employee to whom the payment isdue;

(ii) the reason for the termination of the employment;(iii) the amount payable to each employee;(iv) in the case of retirement on grounds of ill-health, an original medical report from

a Medical Practitioner registered with the Medical Board of Trinidad and Tobagoor such other body outside of Trinidad and Tobago as the Board may accept;

(v) with respect to payments connected with termination of employment or officewhich would not otherwise be chargeable to tax:

(a) where payments are to be made to a spouse, relative or dependant, thenames of the spouse/relative/dependant and the circumstances under whichthe payment is to be made to him/her; and


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(b) Any amount remaining after deducting (a) above shall be treated as income for theyear in which the employment is terminated and irrespective of when payment isreceived, shall not be treated as income of any other year and shall be chargedseparately at the average rate of tax of the employee for the immediately precedingyear of income.

(4) Retirement Severance Benefit

Before payment of Retirement Severance Benefit is made, the employer must contact theBoard of Inland Revenue (PAYE Section) for additional guidance.

(1) When a person receives a retirement benefit, an amount not exceeding $100,000 of suchbenefit is exempt from Income Tax if at the date of his retirement:

(a) he is not entitled to a pension other than under the National Insurance Act or the OldAge Pension Act;

(b) he is not a member of an approved pension Fund Plan, or of a Fund or Scheme that isa Provident Fund; and

(c) he produces evidence to the satisfaction of the Board of Inland Revenue-

(i) that he has retired from insurable employment within the meaning ofthe National Insurance Act;

(ii) that he has attained the age of 60 years.

(2) Calculation of Tax

(a) an amount of $100,000 of the Retirement Severance is exempt from income tax;(b) any amount remaining after the deduction of (a) above is to be included in the

individuals chargeable income and charged to tax according to scale rates.

4. T.D. 4 Supplementary

T.D. 4 certificates are normally supplied to employers by the Board of Inland Revenue each yearaccompanied by instructions for completion and distribution. The Board, however, has noobjection to employers using Computer Printed T.D 4 certificates provided that:

(a) the provisions of the income Tax (Employment) Regulations, and any subsequentamendments are complied with; and

(b) a specimen of the form is submitted to the Board initially for approval. Employersusing the computerized form will be notified by the Board when changes are to bemade to the form due to amended legislation or any other reasons. Amended formsmust also be submitted to the Board for approval.

5. Health Surcharge

With effect from 1st

June, 1987, the Board of Inland Revenue became responsible for the

due computation, collection and recovery of Health Surcharge.

(1) Rates and method of effecting payments:


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(a) employees whose monthly income exceeds $469.99 or whose weeklyincome is more than $109.00, the Health Surcharge to be deducted shouldbe $8.25 per week;

(b) employees whose monthly income is less than $469.99 or whose weeklyincome is less than $109.00, the Health Surcharge to be deducted shouldbe $4.80 per week;

(c) Health Surcharge should be deposited with the Board in cash or by

certified cheque on Form C-3L on or before the 15

th

day of the monthfollowing the month in which the deduction was made.

(2) Health Surcharge is not to be deducted from the following:

(a) individuals under the age of sixteen (16) years;(b) individuals who have attained the age of sixty (60) years. (Deductions

must cease on the day before the individuals sixtieth birthday).(c) Individuals whose sole source of income is from pensions.

6. Disputes

If any dispute arises between employer and employee the Board will determine the issue. Thedisputes may include the following:

(a) the liability to tax of the emoluments;(b) whether a claim to a tax deduction is admissible;(c) whether emoluments fall within any of the classes for which the Board is to determine

the tax deductible.

7. Agreements not to Deduct are Void

Every employer is under an obligation to deduct the tax and any agreement made by suchemployer not to withhold or deduct tax is null and void and will attract penalties.

8. Change of Employment

If an employee changes his job, the deduction of tax by the former employer will, of course,cease. The new employer will deduct on the basis of a new T.D. 1 submitted to him by theemployee.

9. Retirement of Employee

If a pension is paid after retirement of an employee by the former employer, tax deductions are tocontinue as if no change has occurred. If, however, the pension is paid by a person other than theformer employer, e.g., the trustees of a pension fund, the pensioner must provide the trustee witha T.D. 1 for the purpose of tax deductions.

10. Death of Employee


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If emoluments are due to an employee after his death, deductions are to continue as if he werealive.

11. Death of Employer

If an employer dies (but the business continues) his personal representative must continue tomake tax deductions.

12. Change of Ownership-Business

If a business changes hands, the new employer is responsible for the tax deductions.

VI. PAYMENT AND ACCOUNTING FOR TAX AND HEALTH SURCHARGE

1. Payment of tax to the Board of Inland Revenue

All taxes deducted must be paid by the employer to the Board on or before the fifteenth (15th

)day of the month following the month in which the deductions were made. However where aperson ceases to carry on business, the tax must be paid within seven (7) days after the personceases to carry on business. The prescribed forms which must accompany each payment are:

C-3F PAYE Tax Deduction Remittance Form, andC-3L Health Surcharge Deduction Remittance Form.

2. Penalty for Failure to Deduct and Remit Taxes

Any person who fails to deduct or to remit the taxes deducted to the Board on or before the dateprescribed is guilty of an offence and shall pay, unless the Board directs otherwise, in addition tothe tax payable, an additional amount of 100 per cent (100%) of the tax or forty dollars ($40.00)whichever is the greater. Interest is also chargeable on both the tax and the additional amount atthe rate of twenty per cent (20%) per annum, commencing from the date the payment becamedue to the date of payment.

3. Accounting for Tax Deducted and Keeping Records

Every person paying emoluments must keep, to the satisfaction of the Board, a record ofemoluments paid to each employee and taxes deducted from each payment. All records relatingto the payment of emoluments and taxes deducted must be made available for inspection by theBoard at the premises of the employer. It is part of a duly authorized Field Officers duties toinspect these records.

4. Distribution of Certificates of Emoluments Paid and Taxes Deducted


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(i) On or before the last day of February of each year following the year in which taxes

including Health Surcharge were deducted, the employer must give the employee twoT.D. 4 certificates (original and duplicate).

(ii) One copy of T.D. 4 certificate (T.D. 4 Supplementary) in respect of each employee,must be sent to the Board not later than the last day of February of each year. TheBoard also requires one copy of the T.D. 4 Summary Form which is a statement of

total emoluments paid to all employees and total tax deducted.

5. When T.D. 4 Certificate to be Delivered

T.D. 4 Certificates are to be delivered by the employer:

(1) To the employee and the Board:

(a) on or before the last day of February of each year following the year in which taxwas deducted;

(b) on cessation of employment; and

(c) on cessation of a business, not later than one (1) month after.

(2) Upon the death of an employee-to the legal personal representative or next of kin andthe Board, by the fifteenth day of the month following the month in which the deathoccurred.

6. Reconciliation of Records

(a) The total of PAYE and Health Surcharge deductions as per T.D. 4Certificates;

(b) The cumulative total on the last Remittance Form for the year in respect of

Income Tax and Health Surcharge;(c) The total tax deductions as per T.D. 4 Summary Form.

PAYE QUARTERLY

7. Accounting for Arrears of Tax

It is frequently necessary to collect arrears of tax from employees in cases such as-

(a) where PAYE. Deductions have been insufficient or where there is other income;(b) where a Garnishee Order is served on the employer.

The Act (Section 112) enables the Board to instruct the employer to deduct such arrears from payin addition to any PAYE Tax due in accordance with these tables. Such arrears of tax deductedmust be kept quite separate from PAYE. Deductions and must be separately accounted for andremitted to the Board of Inland Revenue.

The Tax deducted through a Garnishee Order must not be shown on the T.D. 4 Certificate

8. Persons Paying Emoluments in the Public Service

Persons attached to the accounting or sub-accounting units in the Public Service who act asemployers of public servants should refer to Ministry of Finance Circular No. 1 dated 31st


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January, 1979. This Circular sets out the procedure to be adopted and forms to be used whenpaying or accounting for tax deductions.

VII. 2002 TAX RATES 1997 2002

Chargeable Income Rates of Tax Income Tax

For every dollar of the first $50,000 28% $50,000 $14,000

For every dollar in excess of $50,000 35%

PAYE QUARTERLY REMMITTANCE RECONCILLATION REPORT

The Board of Inland Revenue wishes to advise that ALL EMPLOYERS are required to complete theQUARTERLY REMITTANCE RECONCILIATION REPORT.

These reports which are mailed to employers should be reproduced, completed and submittedquarterly to the PAYE section, Victoria Courts, Cor. Queen and Edward Streets, Port of Spain by theend of the month following the quarter being reported on, i.e. Quarterly reports are due on April 30 th,

July 31st

, October 31st

and January 31st

.

Information contained on this Form represents cumulative totals of PAYE and Health Surchargededucted; salaries, wages, bonus, pensions and benefits paid; and allowable Deductions granted toeach employee of the organization. All information must be recorded accurately.

Persons who have not received copies in the mail can obtain blank forms at the Miscellaneous TaxesUnit, Victoria Courts Corner Queen and Edward Streets, Port of Spain.

The Board will accept the information on diskette, as long as the designated format is maintained.

The Reconciliation Reports lend to the effective functioning of the PAYE System.

Further information can be had by contacting the PAYE Section at 625 2127 or the TaxpayerRelations Section at 623 7106 ext 321.

Taxpayer Relations SectionInland Revenue Division


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Income Tax Deduction Table

Documents

Transcript of Income Tax Deduction Table